Currency Futures Question

[Soultrader]

Hello guys and gals,

I am complete newbie when it comes to Forex and currency futures. I decided to start watching a few pairs to get a hang of it and perhaps find some good opportunities in the near future to trade.

I have a few questions. First I would prefer to trade currency futures. What pairs are recommended and what are the symbols for Tradestation? I pulled up a Japanese Yen chart with the symbol @JY. On the cme website it states that 1 point is equivalent to $12.50 per contract. Would a move from 0.84 to 0.841 be equivalane to 10 points or $125.00 per contract? I noticed that the liquidit is extremely low for the @JY and just entering would lead to serious slippage.

Im starting off with simple observation and strategies using trendlines for perhaps a 1-3 day swing opportunity. (wont be trading them yet though) Any advice would be appreciated. Thank you.

[notouch]

The problem is that CME quotes the JPY/USD rate whereas if you were trading spot the quote is the USD/JPY rate. There's something called CME e-quivalents that converts it the other way round. It's a better idea to trade Euro or British Pound futures, especially if your trading hours are during US hours. They move in the same way as EUR/USD and GBP/USD although there will be a premium or discount if there is an interest rate differential. For Euro futures one pip is equal to $12.50 so if the price moves from 1.3050 to 1.3150 (that move would be a little bit more than the daily average true range) then you would win or lose $1250. British Pound futures are good because it's $5 a pip. The liquidity is reasonable between the London open and the New York close.

FX is especially sensitive to data releases and interest rate meetings but also great for swing trades lasting a few days or weeks.

[Soultrader]

Thank you for the reply notouch. I am looking to trade a pair during my Tokyo Hours. I prefer to focus on the eminis during the US hours. For currency futures traded on the CME, is the most liquidity found during US and London hours only? I prefer to trade something with minimal slippage.

Do you know the symbol for the British Pound futures? Thank you.

[torero]

James, check out EURJPY, USDJPY, and GBPJPY. I trade the last one from time to time, but the main for me is GBPUSD. Tokyo hours offer decent volatility but better during Londond session, might fit your evening hours.

[notouch]

CME British Pound Futures & Options

The GLOBEX symbol is 6B but I'm not sure that's what TradeStation would use. $6.25 per pip.

Definitely you wouldn't want to trade that during Tokyo hours - it moves within a very narrow range. I would be especially careful trading FX during the Tokyo session because it's usually very quiet - just Japanese exporters filling orders - but sometimes banks go on stop hunting sessions are there's a massive and unexpected move. USD/JPY is dominated by the carry trade so the trend is steadily upwards but sometimes the hedge funds will liquidate their carry trades causing a massive drop. Very risky business. Also consider the Australian and New Zealand Dollars which probably have more life at that time of day.

[Soultrader]

Torero,

I can't seem to find the right symbols for TS. I tried PJYH07 for the British Pound/Yen for TS but it is not giving me historical data.

I cant seem to find the USDJPY symbol as well. grrr... I hate being a newb.

[notouch]

	Quote:	torero
	James, check out EURJPY, USDJPY, and GBPJPY. I trade the last one from time to time, but the main for me is GBPUSD. Tokyo hours offer decent volatility but better during Londond session, might fit your evening hours.

The 0930 GMT economic releases out of the UK are the big market movers for GBP/USD. Also you'll notice some great patterns between the Frankfurt open (0700 GMT) and the London open (0800 GMT) which might be suitable for someone trading from Japan.

[torero]

No slashes, put in daily chart first, just 6 letters. Stay away from the currency futures except for @EC. There's not enough volume when you need to get out at a reasonable price. Why trade a pseudo instrument when you can go straight to the source with volume at all times, the forex?

[Soultrader]

	Quote:	torero
	No slashes, put in daily chart first, just 6 letters. Stay away from the currency futures except for @EC. There's not enough volume when you need to get out at a reasonable price. Why trade a pseudo instrument when you can go straight to the source with volume at all times, the forex?

Okay so basically you recommend I stick with Forex and not currency futures? From my understanding Forex brokers charge free commision because they are ripping you off the spreads to begin with. Wouldnt currency futures provide me with a more equal level playing field?

[notouch]

Most forex brokers are bucketshops - including the one with TradeStation. Your order never makes it to the interbank market so they are not really brokers at all. They create their own little market based on interbank price feeds. Their business model is based on the fact that most of their clients lose so they're happy just to take the money of their clients. They're really just bookmakers. It's in their interest if you lose. The exceptions are Interactive Brokers' IdealPro, EFX Group, HotSpotFX and Currenex. There's plenty of liquidity in British Pound futures if you trade during London hours.